Store Card Debt Costs Shoppers Hundreds

Shoppers are forking out hundreds more pounds than they need to by paying off their debt on store cards rather than switching the balance to credit cards, new figures reveal.

Some people can end up paying 333 per cent more in interest charges on store cards than those who move to a credit card with an interest-free introduction offer, uSwitch.com says.

Interest rates on store cards are often double those of other market leading cards.

Those with a £400 balance who pay off only the minimum amount each month can still save £263 and pay off their debt three years quicker by moving to a credit card.

Nick White, head of personal finance at uSwitch.com, said that many people are now concerned about how to pay off their Christmas overspend on store cards.

He said: "With APRs on many store cards exceeding six times the Bank of England base rate, consumers can make significant savings by carrying a store card balance to a low-rate credit card, enabling them to pay off the debt many years earlier."

"Although the Competition Commission has suggested store cards carry a warning if their APR is over 25 per cent, few providers have done anything to address the staggering rates they charge.

Mr White added that those who are determined to stick with their store cards should ensure they pay off their balances in full each month to avoid forking out for high interest charges.